Units in Mutual Fund – What are the Mutual Fund Units Explained

Units in Mutual Fund – What are the Mutual Fund Units Explained

Friends, in this article today, I will explain to you about the units in Mutual Fund because you must have seen the units option while purchasing mutual funds.

Many people will also know about the units but those who do not know about units,

I will explain today what the units are in the mutual fund.

If you also invest in Mutual Funds, then you must know about units because till you do not know the units,

how can you explain how many units of mutual funds you have and it is very important for you to know this because,

whenever you invest in a mutual fund, you need to know how many units of the mutual fund have been allotted you according to your investment.


What is Units in Mutual Funds

Friends, as you would know that in the stock market different companies are sold according to their shares,

so that a normal and small investor can also invest a small amount according to their situation and budgets.

Similarly Mutual Funds are also divided into smaller parts, so that even a small investor can invest in Mutual Funds.

Just as we divide small portions of companies in the stock market into shares,

similarly in mutual funds every part of the fund of any company is called a units and Mutual Funds can be bought and sold according to that units.

Related Topic :- Minimum Investment in Mutual Funds


Just as an example :  If you say someone that I have bought 1000 shares of a company in the stock market,

Here you are counting the parts of the company in Shares.

Similarly in Mutual Funds you can say that I have purchased 1000 units of a company.

Here you are counting the parts of the company in units.

Also Read This :- Best 5 SIP Start to Invest at Just 100 Rs.


Why Mutual Fund are divided into Units

In this way Mutual Funds are bought and sold not in whole but in small portions.

Each part of fund is called 1 Unit.

Unit is a very small part of each Mutual Fund.

And have to buy units to invest in mutual funds.

This purchase is done by different investors according to their risk and their budget.

Some investors buy these Units through every month SIP.

But some people who can take more risk in mutual funds, they buy it through lump-sum investment at once.

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